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Here’s some good news for homeowners worried that Congress will fail again to renew popular tax
benefits for use in 2014 — especially those allowing for mortgage debt forgiveness and write-offs
for energy-saving improvements and mortgage insurance premiums.

Although there has been no formal announcement, the Senate Finance Committee expects to take up
a so-called “extenders” package within weeks. In December, more than 50 corporate and individual
tax benefits expired, and the House also took no action to extend.

What are these “extenders”?

Tops on the list is the Mortgage Forgiveness Debt Relief Act, a law that has saved large numbers
of homeowners from hefty tax bills. For qualified homeowners whose mortgage debt was reduced or
written off by lenders in connection with loan modifications and short sales, the forgiven amounts
weren’t taxable, the law said.

Also part of the housing benefits that Congress failed to extend in December: A $2,000 tax
credit for construction of energy-efficient new homes, deductions for home improvements that
conserve energy, and write-offs for some mortgage insurance premiums.

Although the Senate committee plans to reconsider the benefits, there is no guarantee that any
specific tax law provision will be part of the bill the committee ultimately considers.

The committee has asked members to suggest what they think should be part of a final package,
which might or might not include all the housing-related provisions.

But bipartisan support for mortgage debt forgiveness renewal is strong. Most tax analysts expect
that a final bill will include some form of renewal.

Meanwhile in the House, there have been no indications about taking up the case of
extenders.

If, as expected, the Senate Finance Committee approves and the full Senate passes some form of
extender package — including two or three of the housing provisions — election-year pressure to
pass some version will be intense.

Bottom line: Although there are hurdles ahead, the outlook for renewal of mortgage forgiveness
debt relief — and possibly other housing benefits — looks more promising now than it has in
months.